SAN FRANCISCO—Before he leaves office later this month, U.S. President Barack Obama is preparing to recommend that the U.S government toughen its stance against Chinese investment in the semiconductor industry, according to the Wall Street Journal.
According to the Wall Street Journal article, published Monday (Jan. 2), the Obama administration is preparing to issue a report by that will include recommendations that would seek to temper what many see as an aggressive incursion by China into an industry that is considered critical to U.S. national security.
The report is being prepared by Obama’s top science and technology adviser, John Holdren.
The report is expected to recommend that the Committee on Foreign Investment in the U.S. (CIFUS) take a stricter stance on potential acquisitions by Chinese entities, according to the Journal article. CIFUS is an inter-agency committee of the U.S. government’s executive branch that reviews the national security implications of foreign investment in U.S. companies or operations.
Amid an unprecedented wave of consolidation in the semiconductor industry over the past two years, the U.S. government has signaled increasing discomfort with the acquisition of chip companies by Chinese firms—especially China’s firms with ties to the Chinese government. Several acquisition proposals have been scrapped after indications from CIFUS that the deals might present a threat to U.S. national security.
Last month, Obama took the extraordinary step of blocking the acquisition of the U.S. assets of a German semiconductor equipment company that was in the process of being acquired by a Chinese investment firm partly owned by China's central government.
Earlier in 2016, deals involving Fairchild Semiconductor, Western Digital and Royal Philips NV’s Lumileds lighting components business fell through based on indications that they would be investigated or outright opposed by CIFUS.
Currently, there is much speculation that an acquisition bid for Lattice Semiconductor by a Chinese investment firm might meet with opposition from the U.S. government. Last month, a group of lawmakers wrote a letter to U.S. Treasury Dept. Secretary Jack Lew urging him to reject that deal.
Decisions on whether to implement any of the report’s recommendations would presumably take place during President-elect Donald Trump’s administration. During the campaign, Trump repeatedly criticized China’s economic policies and often signaled a tough stance on U.S. firms’ offshoring manufacturing to China as well as elsewhere.
—Dylan McGrath covers the semiconductor industry for EE Times.